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Jan. 7, 2005 — Q: Can anything be done about rising credit card rates? I have very large balances due to business ventures, but have never been late or missed payments. I presently have rates at 24.9 percent to 36.9 percent on major US cards. Previously, they were from 12.9 percent to 16.9 percent. I have called and spoken with people but they say they won't lower the rate, even though I've done nothing to cause them to rise. Any help?— Andy T., Columbus, Miss.

You’ll find several cards with single-digit rates and low or no annual fees.

(Keep in mind that, as with all credit cards, the lowest rate may not be the best deal if you pay off your balance every month. In that case, you may be better off with a card that charges no monthly fees.)

The bigger question is: How do credit card companies get away with charging such outrageous interest rates? The theory behind these higher rates is that — unlike a home mortgage or a car loan — a credit card is an unsecured loan. If you don’t pay the money back, the bank can’t exactly come and repossess the dinner or movie tickets you just charged to your card.

But these double-digit rates often bear little relation to the real risk of lending. And that’s a nasty byproduct of one of the principles that makes this country great: States rights. State banking laws vary widely, and more than half the states have no limit on how much credit card lenders can charge. That’s why big card issuers like Citibank have set up shop in South Dakota — one of those states with no limits. What’s worse, the courts have ruled that any state cap on card rates applies to the state where the card was issued — not where the card holder lives. So if you live in, say New York, where interest rates are capped, but your card was issued in a state with no caps, the cap doesn’t apply.

And even with interest rates lower than they’ve been in decades (which makes the “cost of money” very cheap), banks have continued to raise credit card rates and fees to keep fattening their profits. According to our colleagues at NBC News, credit card holders last year were hit with some $21.5 billion in fees — a 10-fold increase from 1980.

In the meantime, one Senator is trying to ban one of the most egregious practices in the credit card industry — that of jacking up your rates, usually with no notice, if your payment is even a few hours late. Sen. Chris Dodd (D-Conn.) introduced a bill this week to ban the practice and force credit card companies to at least notify you when they boost your rate.

Not surprisingly, the American Bankers Association opposes the move. The group told NBC News that "outlawing this risk management tool would have the effect of either restricting credit or raising the cost of credit for everyone.”